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Wednesday, 16 January 2013
Focus Graphite to raise $3.0 mln for Lac Knife in private placement financing
Focus Graphite (CVE:FMS)(OTCQX:FCSMF) has agreed to a $3.0 million private placement financing, with proceeds to be spent on the company's Lac Knife graphite project in Quebec.
The deal, with Cormark Securities, will see Fission sell 3.3 million "flow through" shares at a price of 91 cents each.
The new funds, which will be used to incur general exploration expenses that are qualified as "flow through mining expenditures under the Canadian income tax act, will be spent specifically for infill and exploration drilling at Lac Knife.
In November, the company received a bullish outlook from analysts, as Fundamental Research Corp raised its fair value estimate on Focus after the preliminary economic assessment (PEA) on the graphite explorer's Lac Knife deposit was released last October.
The equity research firm, which also highlighted Focus' strong cash position, raised its fair value estimate on the company to $1.44 per share from $1.21 per share previously. Analyst Nicole Engbert noted the Lac Knife PEA shows high production rates, and three potential saleable products. The long-awaited PEA, which was unveiled in late October, showed average concentrate grades of 92% graphitic carbon.
The company says that Lac Knife is unique because of its cost-mitigating, high concentration of large, medium and small flake graphite. Flake graphite - the most actively pursued type of graphite and associated with next-generation technologies - is made up of layers of graphene, which is the mineral’s base structural element.
The financing, which will go toward advancing the Lac Knife property, is expected to close on about February 5, subject to regulatory approvals.
On Monday, Focus Graphite signed a definitive option deal with Lara Exploration (CVE:LRA) for Lara's Caninde graphite project in Ceara State, northeastern Brazil. Under the terms of the deal, Focus will have two separate options to acquire a total 60% undivided interest in the property, subject to an underlying royalty to a third party on 11 exploration licenses.